ASX-listed Lithium Australia has entered into a joint venture with Galan Lithium that sees the latter pick up an 80 per cent stake in the Greenbushes South lithium project from Lithium Australia. As a result of the JV deal, Lithium Australia retains a 20 per cent free carried exposure to the lithium commodity while also freeing up cash to advance its downstream and battery technology projects.
Greenbushes South sits only about 3km south of WA’s world-class Greenbushes lithium open-cut mine, one of the world’s largest, highest-grade hard-rock spodumene deposits.
Under the terms of the JV transaction, Perth-based Galan Lithium has agreed to issue 1.22 million of its shares to Lithium Australia and sole-fund work on the project, which spans 353 square kilometres, through to the completion of a preliminary feasibility study.
Lithium Australia Managing Director, Adrian Griffin said: "The company’s divestment of a majority interest in the Greenbushes South project to Galan is consistent with our ongoing strategy to advance proprietary, downstream lithium and battery technologies and to deliver an ethical and sustainable supply of energy metals for batteries through innovative minerals processing and battery recycling techniques, thus creating an energy-metals loop.”
“This transaction means that the company reduces its financial commitment and exploration risk yet retains significant lithium commodity exposure by way of both Galan shares and 20 per cent project equity.”
Historical exploration undertaken within the Greenbushes South project indicated the presence of pegmatites, a rock type that may host spodumene, and so provides immediate exploration targets, according to the new JV.
Much of the earlier work focused on tin and tantalum as Greenbushes ore was at different times mined for these metals before spodumene took over the mantle.
Galan Lithium Managing Director, Juan Pablo Vargas de la Vega said: “We are delighted to acquire a significant majority stake in a highly prospective lithium project in a world-renowned lithium district and increase our existing lithium exploration ground at Greenbushes in WA. We have secured an outstanding exploration opportunity in WA to add to our existing portfolio of assets in Argentina that have a potential production profile.”
The Greenbushes mining and processing operation, which is located approximately 90 kilometres south-east of Bunbury in the South West, has been run since May 2014 by Talison Lithium, a JV between Sichuan, China-based group Tianqi Lithium Corporation and US-headquartered Albemarle Corporation.
It produces a concentrate of the lithium mineral spodumene to feed mineral conversion plants in both China and WA and consumers of spodumene concentrates in Europe, North America and China.
Amid an improving lithium price, the $5.2 billion market-capped Australian miner IGO last month signed a deal to buy one-quarter of the Greenbushes asset as well as a 49 per cent interest of the Kwinana lithium hydroxide plant from Tianqi Lithium for a total consideration of US$1.4 billion.
While rationalising its suite of lithium projects and alliances, Lithium Australia continues with research and development on its proprietary extraction processes for the conversion of lithium silicates including mine waste, and of unused fines from spodumene processing, into lithium chemicals.
From those chemicals, Lithium Australia hopes to produce advanced components for the battery industry and for stationary energy storage systems. The company says the recycling of spent lithium-ion batteries was intrinsic to its plan of creating a circular battery economy.
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By Matt Birney
